Permira buys majority stake in EF Kids & Teens

The deal is valued at approximately $1.5bn. EF Education First will retain a significant minority stake in the business, according to a statement. EF and Permira plan to expand the company’s school network and invest in its online learning system.

Unquote sister publication Mergermarket reported in February 2020 that EF had entered exclusivity with Permira for the deal, citing sources who said that Permira was in talks with around five banks to arrange financing for the deal, with leverage at up to 5x. The report also said that the company was being marketed based on EBITDA of $100m.

CVC, Boyu Capital and General Atlantic advanced to the second round of bidding, Mergermarket reported in January 2020. Hillhouse Capital, GIC, Warburg Pincus and Carlyle were among the other sponsors who were part of the auction process, according to Mergermarket.

In April 2020, Mergermarket cited a report from Bloomberg that the sale had been suspended due to the coronavirus pandemic, which could cause bidders to reconsider the EV, which was projected to be up to $2bn.

Permira invested via Permira VII, which held a final close in October 2019 on €11bn. The fund writes equity cheques of €250-1bn for deals with an EV of €500-3bn.

Permira declined to comment when approached by Unquote.

Company
EF Kids & Teens is a subsidiary of EF Education First. The company teaches English to children and teenagers in China and Indonesia, operating 288 schools across 62 cities in China, plus 72 schools in Indonesia. Its parent company EF Education First was founded in 1965. The Kids & Teens business is headquartered in Zurich, Switzerland.

People
EF Education First – Philip Hult (chairman), Jacob Toren (CEO of EF China).
Permira – Robin Bell-Jones (partner).

Advisers
Vendor – JP Morgan (M&A).

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